um, from your grammar I'm getting that when the clutch lever is pulled in all the way the clutch isn't engaging.... This is the way it's supposed to go... Unless you meant that when the clutch lever is pulled in all the way the clutch isn't DISengaging - the bike is still pulling forward, then yes, that is a bad thing....
so, with the slight confusion on direction explained above, I'm a bit confused on what "adjust all the way out" means.. Is it the clutch adjust is unscrewed as far as it it will go, or is bottomed out as close to the lever as possible?
Next, a picture would help a lot...
And an intro so we don't feel like you're just using us when you need help but want to become part of the forum....
and lastly, more accurate punctuation would go a long way in being understood.